Advise on how to get current lender to modify loan on investment property?

[KimTennis]

I need help. My loan is about to reset in Feb. It is a 5 yr adjustable LIBOR with principal and interest payments. I have 10 properties, 8 of them have mortgages. The other two are owned free and clear. 5 of the 8 are 30 yr fixed. That leaves 3 that are ARMs. I have one resetting this year, one next and the last one in two years. My problem is that I always planned on refinancing prior to the reset period. I always did a full doc, asset verified, conforming loan with a min. of a 20% down payment. The guidelines have just changed from accepting applications with no more than 10 mortgages, to now having no more than 4 mortgages. I currently have 8 conforming mortgages. I had no clue this was coming. With the exception of the number of mortgages, we would have still qualified for a conforming loan. Two weeks ago I found a lender who would consider my application as an in house loan. Last week they approved me subject to an appraisal. Friday (2 days ago) the appraisal was submitted stating the current value at $410,000. My payoff is just under $300,000 leaving me at a 75% LTV under current market conditions. I have good credit (FICA score between 680 – 710) and my only debts are the mortgages. We have always paid all credit cards in full every month and our cars are owned free and clear. The bank told me Friday that they no longer offer the loan product I applied for.

Is there anyway the current lender, American Home Mortgage Inc will consider converting my loan to a 30 year fixed at the current rate? I’ve heard about lenders negotiating with homeowners but only owner occupants. I want to keep the house. It’s been a great rental but I don’t want to throw good money after bad. I am willing to walk away from the house but I will not do all the work and end up selling it for nothing. It looks like I have no hope for getting future loans anyway. Needless to say, I am very disappointed. We worked really hard for 13 years and now the market is crap. Can anybody give me some advice on where I could find a good loan or how to get the bank to work with me? Thank you for your assistance.

[Dan Bailey]

Kim, Welcome to the forum and thank you for joining. *** or Moe will be by and answer your questions as soon as they are able. Good luck!!

[KimTennis]

I called the lender AHMI, and asked for a modification. They asked me some questions about my monthly debt (phone bills, electricity, power) and said I qualified to submit a request for a loan modification. I asked the representative what the company was looking for but she said she could not tell me. She said she only took information and told people if they were allowed to ask for a modification or not. I have all my paperwork ready and would like somebody to look over my hardship letter and give me his or her opinion. I'd really love some suggestions. Thank you!

[KimTennis]

To Whom It May Concern:

I am writing this hardship letter in hopes finding help to avoid foreclosure. Our rate is set to adjust in February and we will not be able to afford the increased payment.

Our intention has always been to refinance the loan to a 30-year fixed rate. Prior to accepting this loan we researched the guidelines for refinancing and were told it would be easy. Current guidelines have just been changed (I believe it was in July, 2008) from acceptable applicants having a maximum of 10 mortgaged properties to only four mortgages. We currently have 8 mortgaged properties. Other than that one issue (number of mortgages) I would have qualified for a conforming loan. I have tried every avenue I can think of to refinance this loan. I have asked every lender I know to do an “in-house” loan. Due to current market conditions nobody will help me.

We had one lender who was willing to give us an in-house loan. We submitted full documentation two weeks ago (including two years tax returns) and received approval subject to an appraisal. The appraisal was submitted Friday and then we were told the lender no longer offers the program. We were not rejected; they just decided not to offer the product after we went through the trouble to provide full documentation.

We have never been late on a payment so I know if we can keep the same interest rate, we can continue to make payments indefinitely. We are very careful with our finances and we know exactly how much we can afford. If the payment is increased, it will not make sense for us to keep the property and we’ll have to let it go. We do not want to let one bad loan make us lose everything else we have worked for. Our only choice is to receive a loan modification allowing our current rate to be fixed or cut our losses and let the house go to foreclosure and then be able to keep everything else we have worked so hard to obtain.

Our current loan is LIBOR fixed for 5 years at 5.75%. It is a principal and interest payment that will adjust in Feb 2009. The margin is 5%. We cannot afford to pay an additional $700 - $900 per month of our income. If we can keep our current payment we could wait out the real estate slump for many years.

My best hope is that your company will offer us a workable solution that allows us to keep the house. Please let me know if you require additional information. Thank you for your consideration.


Sincerely,

[Moe Bedard]

Kim,

The letter looks real good..........it is short and to the point..........

Please keep us posted on your progress.........

Good Luck with the modification!!

[KimTennis]

I've talked to the lender several times now and everything looks good. I had to send them a $500 non-refundable fee but they said my application will be reviewed. The processor said he will be recommending my loan for a modification and I should get a final answer next week. They said I would not have to start my time over (I've already paid down 5 years) and that they could probally keep my current rate. He did say there was a small chance they'd increase it a little but if I don't have to play closing costs and I get to keep the 5 years I've already paid, I'm okay. I hope this works out. I'll keep you posted.

[classicgk]

I have a five year LIBOR on a rental property and the margin is 2.75%. That 5% margin sounds really high to me. You might want to get to know a local banker.

[rosalinda]

Kim,

Would you kindly refer me to the guidelines where it reduces max 10 mortgages to 4? I have 6....thanks.

[Martae007]

Hello Everyone,

I have a LIBOR with Chase on a rental property, too. I have a 1st which is the LIBOR and a second interest only. I've applied for loan mods on both in April, 2009, due to economic decline and the property is underwater. I've made a couple of payments on both mortgages to keep it out of foreclosure and Chase had been very slow in responding other than requesting that I resubmit the 92 pages by fax TWICE during these months.

Now I get a call from a representative from the "Special Walk Dept" of Chase with respect to my second mortgage. She informs me that she see's on the computere that my 1st mortgage is in the process of being modified and that the second mortgage has been referred to the new division and she wants me to apply to modify the second????????? She stated that if I made a good faith payment of $800.00 on 85,000.00 second, (the first mortgage balance is 399,000) then I could apply to modify! I informed her that both my loans were with the special lending unit and I was informed 4 days ago that my files were on the underwriter's desk and a decision was forthcoming.... July 27, 2009, collections called me to ask for a payment on the first which was 2750.00, I told them that I only had 2000.00 and would they accept, they informed me that they would take the 2000.00 and start foreclosure proceeding on August 1, 2009. So I kept the funds and decided to wait for the loan mod.
When I got the call yesterday from this new unit, I got a whole different story. I'm guessing that the second is about to be written off and this is the last ditch effort to save it. Any thoughts? And has anyone ever heard of the Special Walk division and what is it. The representative had difficulty explaining what is was.......